Oil prices to rise on demand from India, China

Global oil prices are all set to rise with increase in demand from India and China in the long term, a top Obama administration official has said.

"Over the long term, it is safe to say that oil prices will rise, increasing demand of developing countries, particularly India and China, the transition to more challenging environments to find oil of the multinationals.

All those conspire to say that oil prices in the mid and long term future will be higher," the Energy Secretary Steven Chu told the CNN in an interview telecast on Monday.

The energy secretary said the United States should prepare for such a scenario and take steps to use the oil as efficiently as possible, while simultaneously ensuring transition from oil to alternative energy resources.

Electrification of vehicles is one of such examples, he said.

The fossil fuel that we use today is finite, and although we will have decades of transition period, one wants to look to a future where alternative energies, renewable energies, are going to be a major part of our energy supply, Chu said.

The alternative energy, he observed, is going to grow in the coming years.

"But it's really what we want the future of our energy sources to be," he added.

Chu hopes that electric cars, in the near term, would be more than niche products.

"By near term, I mean three, four, five years. Certainly the battery technology has to improve, but on the other hand, I see a lot of great ideas in the development of new batteries and companies like Nissan and GM. Others are really betting that this battery technology will improve greatly," he said.

"The electric vehicles they are introducing today are great, but, in the coming years, we are going to see even better ones," Chu added.